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How to invest in silver?

Published by Karl Martin Karus in category Precious metals on 19.04.2022
Gold price (XAU-SEK)
18 382,04 SEK/oz
  
- 212,67 SEK
Silver price (XAG-SEK)
213,59 SEK/oz
  
- 1,41 SEK

Precious metals – including investment silver – are widely viewed as a safe haven and are seen as protectors of the actual value of capital. Precious metals play this role, especially in times of increased inflationary pressure, which is often a consequence of various crises and turbulence in the financial markets.

Fiat money is, by nature, based on a contractual value, which enables a fruitful ground for potential manipulation, and after all, money can always be reprinted if necessary.

Investment silver – a vehicle of the value of money over time

It is no surprise that precious metals are the answer for many investor groups to defend and diversify their portfolio for unseeable financial turmoil. Due to the fact, that they are, by definition, a long-term investment.

Precious metals, primarily gold and silver, are usually not a high rate of return asset class, like stocks and cryptocurrencies. Precious metals constitute a form of supplementation of the so-called safety pillow.

An essential advantage of silver is that it does not require a large amount of capital to start investing in it.

Is investing in placement silver profitable?

Investment silver, next to investment gold, is the next common choice when it comes to investing in precious metals.

Silver is one of the most widely traded precious metals on the market. It is popular with investors—silver benefits from several fundamental reasons, including rarity and high demand. Furthermore, with increased demand for practically all commodities, inflation concerns, and a recovering global economy, silver is attracting much attention.

During inflationary eras, silver and other hard assets are typically regarded as ideal stores of value. Silver’s dual character as both a precious and an industrial metal makes it distinctive. Solar panels, electric cars, LED lights, medical gadgets, and other goods employ metal in addition to coins and jewelry.

Investment silver is not a substitute for gold, and a properly diversified investment portfolio will include both metals.

What are the differences between an investment in silver and gold?

Investors must consider many factors when choosing which precious metal they should invest in.

  • Investment silver has less interest to counterfeiters because of the much lower price than gold.
  • Silver price is more affordable than gold to start an investment journey in precious metals.
  • Silver requires more storage space than gold.
  • Silver has much higher industrial use than gold – about 12% of gold supply goes to industrial use, but a whopping 56% of silver supply is used in industry.
  • Silver stockpiles are falling; gold stockpiles are rising – Silver was once held in significant quantities by governments and other organizations. The majority of them, however, no longer have silver stockpiles. The United States, India, and Mexico are the only countries that store silver.
  • Silver has VAT. Silver sales in Sweden are taxes and the seller has to add a 25% VAT, therefore silver is a longer-term investment for private investors who can’t deduct the VAT.


(Image 1. Global gold silver inventories. Source GoldSilver)

Is it worth investing small amounts in silver?

Investment silver has a lower price, making it more accessible to a more extensive range of investors – for example, one can start with a 1 oz Österrikisk Silver Philharmoniker silver coin with a little bit over 350 SEK. This is an essential consideration for investors who are just getting started with investment metals and who adhere to the philosophy of “little steps,” as well as the younger generation who do not typically have vast financial resources. Regularity is the key to success in the investment silver market, just as it is in the gold market. Regular investment of even modest sums helps you defend against short-term changes in the price of this metal and grow your portfolio.

How NOT to invest in silver – the most common mistakes

  • “Putting all eggs in one basket” investment style – The most common advice is not to invest everything in one asset class. This is true for absolutely all asset classes and investment strategies.
  • Buying jewelry silver as an investment might sound like a good idea, but you get less for your money. Silver jewelry has a heavy markup price because it is made for different reasons – it is meant to be stylish, even a luxury accessory item, not an investment.
  • Buying silver gift products as an investment is similar to buying silver jewelry. There is a more considerable markup for the product since other costs are involved, and they are not produced for pure investment reasons.

Check out our silver products list here.

How to choose a silver dealer? Where to buy investment silver?

When searching for a reputable precious metals dealer, you may be tempted to choose the first choice in a quick online search, especially if the pricing is appropriate.

However, not all precious metal dealers are made alike, and it is critical to choose one who is dependable, meticulous, and honest.

Here are some pointers and questions to think about when choosing a precious metals dealer.

Tavex is the undisputed leader in the distribution of precious investment metals in the countries of Northern Europe and one of the leading entities in Central and South-Eastern Europe. More than 30 years of presence on the market allowed us to establish lasting relationships with the largest producers of investment silver, such as

Read more about all of our partners from our previous blog post: Meet our Official Partners

Where to store investment silver? 

Storing investments-silver depends heavily on the amount of precious metal one needs to store.

There are a few common methods of storing investment silver, and the most popular of them is undoubtedly storing the gold at home. Keeping your physical precious metal investments where you live is one of the most common ways to store silver, since most people do not have them in hundreds of kilos.

Other options are to store precious metals in a bank’s vault or safety deposit box or at the dealer where the products were purchased (if they offer such service).

Is it worth keeping investment silver with an external entity?

Although each of the methods mentioned above has both its supporters and opponents, it is worth bearing in mind that there are some key factors to consider when deciding to store investment silver with an external entity.

  • Fees – safe storage such as bank vaults has a considerable cost.
  • Privacy – it is best to limit the knowledge of your investments as much as possible.
  • Physical control – You depend on a counter-party to access your investments.
  • The counter-party – what are the security implications and how trustworthy is the counter-party

Every investor must research and decide where it is the best way to store their precious metal investments.

Is it worth investing in placement silver in 2022?

According to MarketWatch, silver demand is increasing globally and is forecast to hit a new high this year, providing a chance for investors to acquire the metal at prices that haven’t changed much in the last six months.

According to the Silver Institute, total world silver demand will rise by 8% this year to a new high of 1.112 billion ounces.

Michael Cuggino, president and portfolio manager of the Permanent Portfolio Family of Funds, believes that 2021 served as a “basing and consolidating year” that provides a “good entry point for a long-term investor” in either silver or gold, both of which saw prices fall last year as inflation began to emerge but was “explained away as transitory.”

Likely triggers for a silver breakout move this year include:

  • Geopolitical and monetary concerns
  • Inflation issues
  • Growing silver demand

Read also Tavex monthly Technical & Fundamental analysis about gold and silver.

Silver Investment products Tavex recommends:

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